Powell takes the stage tomorrow: is volatility on the way?
And you must ask yourselves - are you ready?
Every year, Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole conference becomes a crucial moment for the markets.
History shows time and again – this is not just a technical speech, but an event that can move the SPY by hundreds of basis points within a few days.
What have we learned from the past?
According to past data:
The Fed's Jackson Hole speech event is a strong driver of volatility:
- 2020 – a sharp rally of +1.41% on the day of the speech, but within five days, a reversal to -2.31%.
- 2021 – a "dovish" (calming) tone sent the market up: +0.88% on the day of the speech and +1.52% the day after.
- 2022 – a hawkish speech ended in a crash of -7.85% within five days.
- 2023 – slight gains the day after, and then another decline – a pattern of short recovery followed by weakness.
- 2024 – a relatively flat open, but five days later – a decline of -4.11%.
2025 – what's happening now?
The SPY has already fallen -1.05% in the five days leading up to the speech, which signals high anticipation among investors.
- This is why stocks that experienced a strong rally this year saw strong profit taking in recent days.
- If Powell sounds too hawkish - further declines, similar to 2022/2024 - are certainly a plausible scenario.
- If he surprises with a dovish tone - a quick surge might occur, but history suggests this rally is usually short-lived.
This coming Friday is expected to be a boiling point in the markets.
No matter what Powell says – volatility is expected to arrive, the only question is in which direction.
And now it's time for you to look at your investment portfolio - and immediately after, in the mirror.
Ask yourselves who you are?
Check your investment portfolio
And prepare yourselves for any scenario
Because this time you want to experience the volatility more calmly.